Mealey's Insurance Insolvency : Mealey's : Legal News & Analysis

Mealey's Insurance Insolvency

August 09, 2024
Panel Reverses, Tosses Claims Against Guaranty Association In Coverage Dispute

GRETNA, La. — A Louisiana appeals court reversed a lower court’s judgment denying the Louisiana Insurance Guaranty Association’s (LIGA) exception of no cause of action and dismissed homeowners’ claims in a dispute over their now-insolvent insurer’s alleged failure to cover damage from Hurricane Ida, finding that the petition fails to state a claim for statutory damages against LIGA.
August 09, 2024
Motion To Confirm $166.6M Arbitral Award Granted To Dutch Insolvency Practitioners

GREENSBORO, N.C. — A North Carolina federal judge on Aug. 8 granted a motion filed by Dutch insolvency practitioners for a Dutch insurer in liquidation to confirm a Dutch tribunal’s arbitral award and judgment, which converts from euros to $166,600,942, finding that the respondents, a former owner of insolvent insurers and his related companies, failed to establish “any grounds for a refusal to confirm the award.”
August 06, 2024
Claims Against Defendant Insurer Alleged Owed $28.9M Are Dismissed By Stipulation

OMAHA, Neb. — Claims against one of what had been four remaining defendants in a suit National Indemnity Co. (NICO) filed over a $157.2 million settlement it reached with Montana regarding alleged asbestos exposures have been dismissed with prejudice under a joint stipulation that a Nebraska federal judge granted.
August 05, 2024
Upon Notice Of Settlement, Judge Dismisses Damage Suit Against Insolvent Insurer

WEST PALM BEACH, Fla. — Three days after homeowners notified a Florida judge that they had settled their case, the judge dismissed their insurance coverage suit against an insolvent insurer and the Florida Insurance Guaranty Association (FIGA) over purported water damage from a leaking dishwasher.
August 01, 2024
Magistrate Grants Continuance For Status Conference In D&O Insurers’ Coverage Row

INDIANAPOLIS — Finding “good cause,” an Indiana federal magistrate judge granted defendant insurers’ motion for a continuance of a status conference in a suit filed against them by an insurer now in rehabilitation, seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
July 29, 2024
After Forced Deal, Insurer Sues Reinsurer’s Former Parent Company In Federal Court

NEW YORK — Alleging a “$300 million fraud,” an insurer sued a holding company in New York federal court, asserting claims for securities and common-law fraud and breach of contract in connection with the insurer’s April 14 purchase of Bermuda-based reinsurer JRG Reinsurance Company Ltd.
July 26, 2024
Moratorium Granted In Rehabilitation Proceeding For Life Insurer, Subsidiaries

HARTFORD, Conn. — A Connecticut judge has granted a moratorium motion filed by the rehabilitator of a life insurer and the subsidiaries that reinsure its liabilities.
July 25, 2024
Panel Says Insolvency Pool Not Entitled To Reimbursement In Workers’ Comp Claim

ATLANTA — The Georgia Court of Appeals affirmed a lower court ruling denying the Georgia Insurers Insolvency Pool’s request for reimbursement from the solvent insurer of a business using a temporary worker from a staffing agency when the agency’s insurer became insolvent, finding that reimbursement is not appropriate because the injured worker was not a borrowed servant of the business.
July 24, 2024
CMS, HHS Seek Dismissal Of Guaranty Association’s MSP Suit Against Them

RALEIGH, N.C. — The U.S. Department of Health and Human Services (DHHS), its secretary and the Centers for Medicare and Medicaid Services (CMS) on July 23 filed a brief in North Carolina federal court supporting summary judgment and dismissal of the North Carolina Insurance Guaranty Association’s (NCIGA) suit against them, arguing that the secretary correctly found that NCIGA, as a primary plan under the federal Medicare Secondary Payer (MSP) statute, must reimburse CMS for a workers’ compensation claim involving an insolvent insurer.
July 23, 2024
Judge Issues Standing Order In Negligence Suit Against Purported Insurer’s Counsel

ATLANTA — A Georgia federal judge issued a standing order outlining case management in a negligence suit against legal counsel for a purported health insurer now in liquidation regarding the law firm’s role in aiding and abetting in an alleged scheme to entice people to purchase health plans that ultimately left “members without coverage and with devastating medical bills.”
July 22, 2024
Supreme Court Denies Rehearing In Civil Rights Suit Involving Guaranty Association

WASHINGTON, D.C — The U.S. Supreme Court on July 22 denied rehearing its previous denial of writ of certiorari filed by a man seeking review of the Fifth Circuit U.S. Court of Appeals’ ruling upholding a district court’s grant of summary judgment to an off-duty sheriff’s deputy and the Louisiana Insurance Guaranty Association (LIGA) in the man’s suit alleging that the off-duty officer used excessive force and violated the man’s civil rights when restraining him.
July 19, 2024
Insureds File Contempt Motion In Hurricane Coverage Row With Guaranty Association

LAKE CHARLES, La. — Insureds whose rental property purportedly incurred hurricane damage filed a contempt motion in Louisiana federal court against an independent adjustor for its failure to respond to a subpoena in their hurricane coverage dispute with the Louisiana Insurance Guaranty Association (LIGA), which was substituted for their now-insolvent insurer.
July 19, 2024
Receiver’s Determination Proposal In Reinsurer’s Liquidation Draws Feedback

WILMINGTON, Del. — Standard of review has emerged as an issue of contention in Delaware Chancery Court filings concerning final determination procedures in the liquidation of a life and health reinsurer, with the receiver’s proposal that an abuse of discretion standard be used for his proofs of claim recommendations drawing objections.
July 19, 2024
Discovery Deadline Unchanged In SEC Suit Against Owner Of Insurers In Receivership

WINSTON-SALEM, N.C. — A North Carolina federal magistrate judge granted in part a joint motion to extend the case schedule in the U.S. Securities and Exchange Commission’s suit alleging that an advisory services company, its former executive and its former owner, who also owned insurers now in receivership, defrauded clients of more than $75 million, allowing an extra 30 days for “additional fact discovery” but keeping the deadline for close of discovery.
July 18, 2024
Preliminary Injunction Entered In Fraud Suit Over Secured Loans

NEW YORK — A New York federal judge has entered a preliminary injunction against six defendants — including the parent company of Bermuda reinsurer 777 Re Ltd. — in a suit over fraud and racketeering allegations concerning a secured credit facility and related guaranty agreement.
July 17, 2024
Stay Granted In Hurricane Coverage Row After Guaranty Association Substitution

LAKE CHARLES, La. — A Louisiana federal judge granted a motion to stay filed by defendant Louisiana Insurance Guaranty Association (LIGA), which was substituted for a now-insolvent insurer in a hurricane coverage dispute, finding the stay appropriate due to the possibility of the restoration company that intervened in federal court intervening in a similar state court suit.
July 17, 2024
Magistrate Extends Response Filing Time For D&O Insurers In Coverage Dispute

INDIANAPOLIS — Without providing an explanation, an Indiana federal magistrate judge granted in part defendant insurers’ motion for extension to respond to a summary judgment motion filed by an insurer now in rehabilitation in its suit against them seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
July 16, 2024
Judge Allows Insurer To Seal Portions Of Complaint Disputing Coverage For Diocese

SANTA ANA, Calif. — A federal judge in California on July 15 granted an insurer’s administrative motion to seal references to confidential information and documents in its declaratory judgment lawsuit disputing coverage for underlying sexual abuse lawsuits brought under the California Child Victims Act against The Roman Catholic Bishop of Orange.
July 16, 2024
Case Management Order Issued In Hurricane Coverage Suit After Substitution Denied

BATON ROUGE, La. — A Louisiana federal judge issued a case management order docketed July 15 in a Hurricane Ida coverage dispute after a magistrate judge denied a homeowner’s motion to substitute the Louisiana Insurance Guaranty Association (LIGA) for the defendant, a homeowners insurer that assumed policies for a now-insolvent insurer, finding substitution “improper” due to a lack of evidence regarding the defendant’s obligations under the policy.
July 16, 2024
Mass. Panel Reverses Board Ruling Denying Reimbursement To Workers’ Comp Insurer

BOSTON — A Massachusetts appellate court reversed a review board’s decision upholding the denial of a now-insolvent insurer’s claim for ongoing reimbursements from the Massachusetts Workers’ Compensation Trust Fund, finding that though the insurer was in a run-off period and not assessing premiums, the exception limiting reimbursements to insurers paying assessments into the fund is inapplicable to insurers in run-off.
July 05, 2024
N.C. High Court Remands For Specific Performance Of MOU Involving Insolvent Insurers

RALEIGH, N.C. — The North Carolina Supreme Court granted parties’ joint motion to remand a case to a lower court for implementation of a “specific performance remedy” outlined in the lower court’s judgment regarding enforcement of a memorandum of understanding (MOU) between insolvent insurers, specified companies and Greg E. Lindberg, who was recently convicted on retrial of bribing the North Carolina insurance commissioner.
July 03, 2024
Constructive Trust Claims Deadline Set In Liquidation Of Vesttoo And Affiliates

WILMINGTON, Del. — In the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates, a Delaware federal bankruptcy judge set a July 22 deadline for asserting constructive trust claims and overruled the liquidating trustee’s objection regarding compensation for special counsel retained by the debtors.
July 02, 2024
Appeal Over Confirmation Of Vesttoo’s Liquidation Is Voluntarily Dismissed

WILMINGTON, Del. — An appeal of the order confirming the Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates has been voluntarily dismissed pursuant to a joint stipulation.
June 27, 2024
2nd Circuit Dismisses Bid To Overturn Revival Of Adversary Proceeding

NEW YORK — In a summary order citing a lack of appellate jurisdiction, a Second Circuit U.S. Court of Appeals panel dismissed consolidated appeals over revival of an adversary proceeding in federal bankruptcy court relating to allegations of fraudulent conveyances from a reinsurer in liquidation.
June 26, 2024
2 Stipulated Dismissals Granted In Insurer’s Suit Over Asbestos Liabilities Row

OMAHA, Neb. — Two defendants referred to as reinsurers in a suit National Indemnity Co. (NICO) filed over a $157.2 million settlement it reached with Montana regarding alleged asbestos exposures have been dismissed with prejudice under a joint stipulation that a Nebraska federal judge granted June 24.